UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
PIER 1 IMPORTS, INC.
(Name of Issuer)
Common Stock, $1.00 Par Value Per Share
(Title of Class of Securities)
720279108
(CUSIP Number)
with copies to:
Jon Scheving Thorsteinsson John M. Reiss, Esq. David M. Barbash, Esq.
Arev Gregory Pryor, Esq. Danika M. Haueisen, Esq.
Bankastraeti 5 White & Case LLP Nixon Peabody LLP
101 Reykjavik 1155 Avenue of the Americas 437 Madison Avenue
Republic of Iceland New York, NY 10036 New York, NY 10022
+44 7843 462247 (212) 819-8247 (212) 940-3121
--------------------------------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
January 25, 2006
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_].
SCHEDULE 13D
-------------------------------------
CUSIP No. 720279108
-------------------------------------
--------- ----------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
Jakup a Dul Jacobsen
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
--------- ----------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [X]
--------- ----------------------------------------------------------------------
3 SEC USE ONLY
--------- ----------------------------------------------------------------------
4 SOURCE OF FUNDS
OO (see Item 3)
--------- ----------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [_]
--------- ----------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Denmark
--------- ----------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY OWNED BY 7 SOLE VOTING POWER
EACH REPORTING PERSON WITH 0
-------- ----------------------------
8 SHARED VOTING POWER
8,594,200(1)
-------- ----------------------------
9 SOLE DISPOSITIVE POWER
0
-------- ----------------------------
10 SHARED DISPOSITIVE POWER
8,594,200(1)
--------- ----------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,594,200(1)
--------- ----------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [_]
--------- ----------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.90%
--------- ----------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
--------- ----------------------------------------------------------------------
(1) Jakup a Dul Jacobsen may be deemed to be the beneficial owner of the
shares of common stock of Pier 1 Imports, Inc. reported herein by
Lagerinn ehf through his direct ownership of Lagerinn ehf. See Item 3.
2
SCHEDULE 13D
-------------------------------------
CUSIP No. 720279108
-------------------------------------
--------- ----------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
Lagerinn ehf
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
--------- ----------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [X]
--------- ----------------------------------------------------------------------
3 SEC USE ONLY
--------- ----------------------------------------------------------------------
4 SOURCE OF FUNDS
WC, BK, OO (see Item 3)
--------- ----------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [_]
--------- ----------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of Iceland
--------- ----------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY OWNED BY 7 SOLE VOTING POWER
EACH REPORTING PERSON WITH 0
-------- ----------------------------
8 SHARED VOTING POWER
8,594,200(1)
-------- ----------------------------
9 SOLE DISPOSITIVE POWER
0
-------- ----------------------------
10 SHARED DISPOSITIVE POWER
8,594,200(1)
------------------------------------------ -------- ----------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,594,200(1)
--------- ----------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [_]
--------- ----------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.90%
--------- ----------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
--------- ----------------------------------------------------------------------
(1) Lagerinn ehf may be deemed to be the beneficial owner of the shares of
common stock of Pier 1 Imports, Inc. through its direct ownership of
certain shares of common stock and certain arrangements with Kaupthing
Bank hf. See Item 3.
3
SCHEDULE 13D
-------------------------------------
CUSIP No. 720279108
-------------------------------------
--------- ----------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
Kaupthing Bank hf.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
--------- ----------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [X]
--------- ----------------------------------------------------------------------
3 SEC USE ONLY
--------- ----------------------------------------------------------------------
4 SOURCE OF FUNDS
WC (see Item 3)
--------- ----------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [_]
--------- ----------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of Iceland
------------------------------------------ -------- ----------------------------
NUMBER OF SHARES BENEFICIALLY OWNED BY 7 SOLE VOTING POWER
EACH REPORTING PERSON WITH 0
-------- ----------------------------
8 SHARED VOTING POWER
4,251,800(1)
-------- ----------------------------
9 SOLE DISPOSITIVE POWER
0
-------- ----------------------------
10 SHARED DISPOSITIVE POWER
4,251,800(1)
--------- ----------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,251,800(1)
--------- ----------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [X]
--------- ----------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.90%
--------- ----------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
BK
--------- ----------------------------------------------------------------------
(1) Kaupthing Bank hf. may be deemed to be the beneficial owner of the
shares of common stock of Pier 1 Imports, Inc. through arrangements
with Lagerinn ehf. Kaupthing Bank hf. hereby disclaims beneficial
ownership of the shares of common stock of Pier 1 Imports, Inc. held
by Lagerinn ehf other than pursuant to such arrangements. See Item 3.
4
Item 1. Security and Issuer
This statement on Schedule 13D (this "Statement"), relates to the
common stock, $1.00 par value per share (the "Common Stock"), of Pier 1 Imports,
Inc., a Delaware corporation (the "Issuer"). According to the Issuer's most
recent Form 10-Q filed with the U.S. Securities and Exchange Commission on
January 5, 2006, the principal executive offices of the Issuer are located at
100 Pier 1 Place, Fort Worth, Texas 76102.
Item 2. Identity and Background
(a) This statement on Schedule 13D is being filed by: (i) Jakup a Dul
Jacobsen ("Jacobsen"), from the Faroe Islands and a citizen of Denmark who
engages in activities and maintains holdings in a number of jurisdictions; (ii)
Lagerinn ehf, a Republic of Iceland corporation ("Lagerinn"); and (iii)
Kaupthing Bank hf., a Republic of Iceland Public Limited Company ("Kaupthing").
Jacobsen, Lagerinn and Kaupthing are hereinafter sometimes collectively referred
to as the "Reporting Persons".
(b) The business address of Jacobsen is c/o Lagerinn at Sundaborg 7, 104
Reykjavik, Republic of Iceland.
The address of the principal office and principal business of Lagerinn is
Sundaborg 7, 104 Reykjavik, Republic of Iceland.
The address of the principal office and principal business of Kaupthing is
Borgartun 19, IS-105 Reykjavik, Republic of Iceland
(c) Jacobsen is an investor who engages in activities and maintains
holdings in a number of jurisdictions and is the Chairman of Lagerinn.
Lagerinn is wholly-owned by Jacobsen. Lagerinn is a holding company through
which Jacobsen holds investments.
Kaupthing is a commercial bank, registered in the Republic of Iceland.
The attached Schedule A lists the executive officers and directors of
Lagerinn and Kaupthing and contains the following information with respect to
each such person: (i) name; (ii) business address; (iii) present principal
occupation or employment and the name, principal business and address of any
corporation or other organization in which such employment is conducted; and
(iv) citizenship.
(d) During the past five years, neither Jacobsen or Lagerinn nor, to the
best of Jacobsen's or Lagerinn's knowledge, any person named as a Lagerinn
executive officer in Schedule A to this Statement, has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
During the past five years, neither Kaupthing nor, to the best of Kaupthing's
knowledge, any person named as a Kaupthing executive officer or outside director
in Schedule A to this Statement, has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
5
(e) During the past five years, neither Jacobsen or Lagerinn nor, to the
best of Jacobsen's or Lagerinn's knowledge, any person named as a Lagerinn
executive officer in Schedule A to this Statement, was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which such person was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activity
subject to, federal or state securities laws or finding any violation with
respect to such laws. During the past five years, neither Kaupthing nor, to the
best of Kaupthing's knowledge, any person named as a Kaupthing executive officer
or outside director in Schedule A to this Statement, was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which such person was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activity
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) Jacobsen is from the Faroe Islands and is a citizen of Denmark.
Lagerinn is a Republic of Iceland corporation. Kaupthing is a Republic of
Iceland Public Limited Company.
Item 3. Source and Amount of Funds or Other Consideration
Jacobsen and Lagerinn beneficially own 8,594,200 shares of Common Stock
(the "Shares"). A total of 4,251,800 of the Shares were purchased by means of
equity swap agreements between Lagerinn and Kaupthing described below. The
aggregate purchase price of the 4,251,800 Shares beneficially owned by Jacobsen,
Lagerinn and Kaupthing (the "Equity Swap Shares") was $48,110,498. The remainder
of the Shares (4,342,400 Shares) are directly owned by Lagerinn. The aggregate
purchase price of the Shares directly owned by Lagerinn was $44,992,429. The
Equity Swap Shares were purchased by Kaupthing in accordance with equity swap
agreements, by and between Kaupthing and Lagerinn (the "Equity Swap
Agreements"). Lagerinn and Kaupthing may be deemed to be the beneficial owners
of the Equity Swap Shares because they entered into the Equity Swap Agreements.
Jacobsen may be deemed to beneficially own all the Shares because of his direct
ownership of all the shares of Lagerinn.
Kaupthing has purchased the Equity Swap Shares pursuant to the Equity Swap
Agreements by using available working capital. Lagerinn has the right at any
time to close out any of the Equity Swap Agreements and purchase the Equity Swap
Shares underlying such Equity Swap Agreement. The Equity Swap Agreements expire
on April 5, 2006 and April 30, 2006, respectively (which dates are collectively
referred to as the "Closing Dates"). On each of the Closing Dates, or earlier if
Lagerinn exercises its right to close out any of the Equity Swap Agreements,
Lagerinn is obligated to purchase the Equity Swap Shares subject to the
respective agreement from Kaupthing pursuant to such expired or closed-out
Equity Swap Agreement. Lagerinn has the exclusive right to direct Kaupthing to
vote and dispose of the Equity Swap Shares. Pursuant to the Equity Swap
Agreements, Lagerinn bears the economic risk and benefit of the Equity Swap
Shares. Any dividends paid on the Equity Swap Shares shall be paid to Lagerinn
on the Closing Dates unless Lagerinn exercises its right to close out the Equity
Swap Agreements early, at which point any dividends paid on such Equity Swap
Shares will be paid to Lagerinn. If Lagerinn does not purchase the Equity Swap
Shares by the Closing Dates, Kaupthing has the right to dispose of the Equity
Swap Shares underlying such expired Equity Swap Agreement as it sees fit and
shall pay to Lagerinn, with respect to the Equity Swap Shares purchased pursuant
to each expired Equity Swap Agreement, the increase in value of such Equity Swap
Shares from the date of such Equity
6
Swap Agreement (subject to certain offsets for fees and brokerage commissions).
If Lagerinn does not purchase the Equity Swap Shares by the Closing Dates and
the Equity Swap Shares decrease in value, Lagerinn shall pay to Kaupthing,
pursuant to the Equity Swap Agreements, the amount of the decrease in value of
such Equity Swap Shares from the date of such Equity Swap Agreement (together
with certain fees and brokerage commissions). Lagerinn is also obligated to pay
to Kaupthing (i) interest on the purchase price of the Equity Swap Shares
purchased pursuant to the Equity Swap Agreements ranging from 5.7663% to
5.9355%; and (ii) certain fees. Jacobsen and Lagerinn have pledged certain
assets other than the Shares to Kaupthing to secure Lagerinn's obligations under
the Equity Swap Agreements. The foregoing summary of the Equity Swap Agreements
is qualified in its entirety by reference to the Equity Swap Agreements, copies
of English translations of which are filed as Exhibit B, Exhibit C and
Exhibit D to this Statement. Lagerinn expects that it will purchase the Shares
from Kaupthing by using available working capital.
Lagerinn financed the purchase of the Shares directly owned by Lagerinn
with funds borrowed through a loan from Landsbanki Islands hf. ("Landsbanki").
Pursuant to a committed revolving credit facility, dated February 6, 2006
between Lagerinn and Landsbanki, Lagerinn may borrow up to USD 50 million at a
floating rate based on a spread over LIBOR (the "Loan Agreement"). Jacobsen and
Lagerinn have pledged certain assets, including the Shares (other than the
Equity Swap Shares), to Landsbanki to secure Lagerinn's obligations under the
Loan Agreement. Landsbanki originally purchased 4,342,200 Shares on behalf of
Lagerinn. Lagerinn then purchased such Shares from Landsbanki with the proceeds
of the loan from Landsbanki. The foregoing summary of the Loan Agreement is
qualified in its entirety by reference to the Loan Agreement, a copy of which is
filed as Exhibit E to this Statement.
Item 4. Purpose of Transaction
The acquisition of the Shares by the Reporting Persons is for investment
purposes. Lagerinn intends to monitor the Company's business, trading
performance, operating results, financial position and prospects and may modify
its plans in the future. In its capacity as a shareholder, Lagerinn has
contacted and held discussions with members of the Company's management and may
contact the Company's board of directors or management again in the future.
Depending on market conditions, their continuing evaluation of the business and
prospects of the Issuer and other factors, the Reporting Persons may dispose of
or acquire additional securities of the Issuer. Except as otherwise described
herein or as expressly stated below, no Reporting Person, and to the best
knowledge of the Reporting Persons, none of the persons set forth on Schedule A,
has any present plan or proposal that relates to or would result in:
(a) The acquisition by any person of additional securities of the Issuer,
or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer;
7
(d) Any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend policy of
the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure;
(g) Changes in the Issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or
(j) Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer
(a)-(b) Set forth in the table below is the number and percentage of shares
of Common Stock beneficially owned by each Reporting Person as of February 6,
2006.
Number of Shares Number of Shares Aggregate
Beneficially Owned with Beneficially Owned with Number of Percentage of
Sole Voting and Shared Voting and Shares Class
Dispositive Power Dispositive Power Beneficially Beneficially
Name Owned Owned(1)
------------------------------------------------------------------------------------------------------------------------------
Reporting Persons 0 8,594,200 8,594,200 9.90
Lagerinn ehf (2) 0 8,594,200 8,594,200 9.90
Jakup a Dul Jacobsen (2) 0 8,594,200 8,594,200 9.90
Kaupthing Bank hf. (3) 0 4,251,800 4,251,800 4.90
(1) The percentages of Common Stock indicated in this table are based on the
86,812,032 shares of Common Stock outstanding as of January 3, 2006, as
disclosed in the Issuer's most recent Form 10-Q filed with the Securities
and Exchange Commission. Any Common Stock not outstanding which is subject
to options or conversion privileges which the beneficial owner had the
right to exercise on or within 60 days after the date hereof is deemed
outstanding for purposes of computing the percentage of Common
8
Stock owned by such beneficial owner and for the Reporting Persons but is
not deemed outstanding for the purpose of computing the percentage of
outstanding Common Stock owned by any other beneficial owner.
(2) Lagerinn may be deemed to be the beneficial owner of the Equity Swap Shares
through arrangements with Kaupthing. Jacobsen may be deemed to be the
beneficial owner of the Shares reported herein as beneficially owned by
Lagerinn through his direct ownership of Lagerinn. See Item 3.
(3) Kaupthing may be deemed to be the beneficial owner of the Equity Swap
Shares through arrangements with Lagerinn. Kaupthing hereby disclaims
beneficial ownership of the Shares held by Lagerinn other than pursuant to
such arrangements. See Item 3.
Other than as described above, no Reporting Person, and to the best
knowledge of the Reporting Persons, none of the persons set forth on Schedule A,
beneficially owns any securities of the Issuer.
(c) Information concerning transactions in the Common Stock effected by the
Reporting Persons during the past sixty (60) days is set forth in Schedule B
hereto and is incorporated herein by reference. The transactions by Kaupthing
listed on Schedule B hereto were effected in open market purchases on the New
York Stock Exchange by Kaupthing Securities, Inc., a Delaware corporation and
subsidiary of Kaupthing. The transactions by Landsbanki listed on Schedule B
hereto were effected in open market purchases on the New York Stock Exchange by
Bear, Stearns & Co., Inc., a Delaware corporation and brokerage firm.
(d) Dividends on the Equity Swap Shares will be paid to Kaupthing, in
relation to its respective holdings, as the record owner of the Equity Swap
Shares at all times prior to the Closing Date. Any such dividends, however, are
to be paid to Lagerinn on the Closing Date.
Other than as described above, to the best knowledge of the Reporting
Persons, no person (other than the Reporting Persons) has the right to receive
or the power to direct the receipt of dividends from, or the proceeds from the
sale of, the Shares.
(e) Not applicable.
Item 6. Contracts, Agreements, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer
The information set forth, or incorporated by reference, in Item 3 is
hereby incorporated by this reference in this Item 6.
Other than as described in this Statement, to the best knowledge of the
Reporting Persons there are no contracts, arrangements, understandings or
relationships among the Reporting Persons or the persons set forth on Schedule
A, and between any such persons and any other person, with respect to any
securities of the Issuer, including but not limited to, transfer and voting of
any of the securities of the Issuer, joint ventures, loan or option
arrangements, put or
9
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies or a pledge or contingency the occurrence of which would
give another person voting power or investment power over the securities of the
Issuer.
Item 7. Material to be Filed as Exhibits
Item 7 of the Schedule 13D is supplemented as follows:
Exhibit No. Description
A Agreement among Jacobsen, Lagerinn and Kaupthing, dated
February 6, 2006 to file this Statement jointly on behalf of
each of them.
B Agreement Concerning Swap Agreement On Equity, dated
October 31, 2005 by and between Kaupthing and Lagerinn.
C Agreement Concerning Swap Agreement On Equity, dated
November 13, 2005 by and between Kaupthing and Lagerinn.
D Agreement Concerning Swap Agreement On Equity, dated
December 9, 2005 by and between Kaupthing and Lagerinn.
E Committed Revolving Credit Facility, dated February 6, 2006
between Lagerinn and Landsbanki.
10
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 6, 2006
JAKUP A DUL JACOBSEN
/s/ Jakup a Dul Jacobsen
--------------------------------------
LAGERINN EHF
/s/ Sigurdur Berntsson
--------------------------------------
Name: Sigurdur Berntsson
Title: Chief Financial Officer
11
KAUPTHING BANK HF.
/s/ Hannes Frimann Hrolfsson
--------------------------------------
Name: Hannes Frimann Hrolfsson
Title: Head of FX and Derivatives Sales
Treasury of Kaupthing Bank Iceland
/s/ Bjork Thorarinsdottir
--------------------------------------
Name: Bjork Thorarinsdottir
Title: Deputy Managing Director Corporate
Banking Treasury of Kaupthing Bank
Iceland
12
SCHEDULE A
----------
Executive Officers and Directors of Lagerinn ehf and Kaupthing Bank hf.
Name Citizenship Present Principal Occupation or Business Address
Employment
------------------------------------------------------------------------------------------------------------------------------------
Lagerinn ehf Executive Officers
Sigurdur Berntsson Republic of Iceland Chief Financial Officer of Sundaborg 7
Lagerinn ehf 104 Reykjavik
Republic of Iceland
Jakup a Dul Jacobsen Denmark Chairman of Lagerinn ehf Sundaborg 7
104 Reykjavik
Republic of Iceland
Kaupthing Bank hf. Executive Officers
Hreidar Mar Sigurdsson Republic of Iceland Group Chief Executive Officer of Borgartun 19
Kaupthing Bank hf IS-105 Reykjavik
Republic of Iceland
Hannes Frimann Hrolfsson Republic of Iceland Head of FX and Derivatives Sales Borgartun 19
Treasury of Kaupthing Bank Iceland IS-105 Reykjavik
Republic of Iceland
Guomundur Porour Republic of Iceland Managing Director Treasury of Borgartun 19
Guomundsson Kaupthing Bank Iceland IS-105 Reykjavik
Republic of Iceland
Sigurdur Einarsson Republic of Iceland Executive Chairman Borgartun 19
IS-105 Reykjavik
Republic of Iceland
Kaupthing Bank hf. Outside Directors
Hjorleifur Thor Jakobsson Republic of Iceland CEO of Oliufelagio ehf Borgartun 19
IS-105 Reykjavik
Republic of Iceland
Finnur Ingolfsson Republic of Iceland CEO of Vatryggingafelag Islands hf. Borgartun 19
IS-105 Reykjavik
Republic of Iceland
13
Name Citizenship Present Principal Occupation or Business Address
Employment
------------------------------------------------------------------------------------------------------------------------------------
Gunnar Pall Palsson Republic of Iceland President of Verzlunarmannafelag Borgartun 19
Reykjavikur IS-105 Reykjavik
Republic of Iceland
Brynja Halldorsdottir Republic of Iceland Chief Financial Officer Borgartun 19
of BYKO IS-105 Reykjavik
Republic of Iceland
Tommy Persson Kingdom of Sweden CEO of Lansforsakringar AB Borgartun 19
IS-105 Reykjavik
Republic of Iceland
Asgeir Thoroddsen Republic of Iceland Attorney to the Supreme Court of Borgartun 19
Iceland IS-105 Reykjavik
Republic of Iceland
Niels de Coninck-Smith Kingdom of Denmark CEO of Ferrosan A/S Borgartun 19
IS-105 Reykjavik
Republic of Iceland
Bjarnfredur H. Olafsson Republic of Iceland District Attorney Borgartun 19
IS-105 Reykjavik
Republic of Iceland
14
SCHEDULE B
----------
Transactions in the Shares by the Reporting Persons During the Past Sixty (60)
Days
Date of Average Price
Name Transaction Amount of Shares Per Share
--------------------------------------------------------------------------------
Kaupthing(1) 12/15/2005 405,000 $10.2873
Landsbanki(2) 1/24/2006 80,000 $9.1775
Landsbanki(2) 1/25/2006 400,000 $9.5572
Landsbanki(2) 1/26/2006 425,000 $9.7921
Landsbanki(2) 1/27/2006 500,000 $10.0325
Landsbanki(2) 1/30/2006 500,000 $9.9807
Landsbanki(2) 1/31/2006 374,900 $10.7062
Landsbanki(2) 2/1/2006 500,000 $10.8571
Landsbanki(2) 2/2/2006 1,100,000 $10.7523
Landsbanki(2) 2/3/2006 462,500 $10.8050
Lagerinn (3) 2/6/2006 4,342,400 $10.3612
(1) Kaupthing purchased and holds the Kaupthing Shares pursuant to the Equity
Swap Agreements. See Item 3.
(2) Landsbanki originally purchased the Shares indicated above at the request
of Lagerinn. See Item 3.
(3) Lagerinn has purchased from Landsbanki all Shares originally purchased by
Landsbanki with funds borrowed through a loan with Landsbanki. See Item 3.
15
EXHIBIT A
---------
JOINT FILING AGREEMENT
This will confirm the agreement among the undersigned that the Schedule 13D
filed on or about this date and any amendments thereto with respect to
beneficial ownership by the undersigned of shares of common stock, $1.00 par
value per share, of Pier 1 Imports, Inc. is being filed on behalf of each of the
undersigned in accordance with Rule 13d-1(k)(1) under the Securities and
Exchange Act of 1934, as amended. This agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Dated: February 6, 2006
JAKUP A DUL JACOBSEN
/s/ Jakup a Dul Jacobsen
----------------------------------
LAGERINN EHF
/s/ Sigurdur Berntsson
----------------------------------
Name: Sigurdur Berntsson
Title: Chief Financial Officer
16
KAUPTHING BANK HF.
/s/ Hannes Frimann Hrolfsson
----------------------------------
Name: Hannes Frimann Hrolfsson
Title: Head of FX and Derivatives
Sales Treasury of
Kaupthing Bank Iceland
/s/ Bjork Thorarinsdottir
----------------------------------
Name: Bjork Thorarinsdottir
Title: Deputy Managing Director
Corporate Banking Treasury of
Kaupthing Bank Iceland
17
EXHIBIT B
---------
Agreement Concerning Swap Agreement On Equity, dated October 31, 2005 by and
between Kaupthing and Lagerinn.
This agreement is a translation of an agreement made between Kaupthing Bank hf.,
[Icelandic id no.], herein after called "the Bank" and Lagerinn ehf.,
[Icelandic id no.] dated in October 2005, and is not a copy of the
Equity Swap Confirmation ID nr. AFS10440 itself. If any difference between the
English and Icelandic text occurs, the Icelandic version shall prevail.
EQUITY SWAP CONFIRMATION ID NR. AFS10440
LAGERINN EHF.
Parties to this contract: Kaupthing Bank hf., [Icelandic id no.], herein called
"the Bank" and Lagerinn ehf., [Icelandic id no.],
Smaratorg 1, 200 Kopavogur, herein after called "the
Client".
Date of contract: 31st of October 2005
Start of interest period: 31st of October 2005
Closing date: 30th of April 2006
Due date: Closing date, or the date which the contract is closed
if earlier.
Reference number: 36425
SWAPS ON CLOSING DAY
Reference amount:
Amount in
Currency Ratio Exchange rate currency Amount in ISK
---------- --------- ------------- -------------- ---------------
USD 100.00% 61.20 2,641,754.08 161,675,350
The reference amount is equal to the value of the reference shares. The fee for
the contract is not included in the reference amount.
Reference shares:
Nominal Amount in
Ticker Currency amount Exchange rate currency Amount in ISK
-------- ---------- --------- ------------- ------------ -------------
PIR US USD 256,900 10.2832 2,641,754.08 161,675,350
The reference shares are shares in PIR US (Pier 1 Imports Inc. isin number
US7202791080)
Stock split: In the event of split shares being issued during the
contract period, these same shares are then owned by
the Bank, while reference shares named in this
contract will at the same time increase according to
the split shares issued.
Dividend: Dividends, if any, from reference shares during the
contract period shall be paid by the Bank to the
Client on the closing day of the contract.
OBLIGATION OF CLIENT
Interest period: The interest period in each instance shall be from the
first date of interest period to the due date.
Due date: Closing date, or the date which the contract is closed
if earlier.
Base of interest at date of contract:
Currency Base interest Markup Interest in total
---------- ------------- -------- -----------------
USD 4.4663% 1.30% 5.7663%
Interest is calculated on the reference amount for the interest period.
Bank clearance: A/360, except for GBP, then it's A/365
18
Payment: The Client has to pay any and all increases that may
occur on the exchange rate of the currency in the
reference amount from the date of the contract, but
any and all decreases in the exchange rate of the
currency that may occur will be subtracted. The Client
must also pay interest on the reference amount in
accordance with this contract. All currency shall be
exchanged for ISK on the due date according to the
average general exchange rate of the appropriate
currency which the Bank publishes in a general
currency exchange rate table on the due date, unless
the parties agree to a different exchange rate.
Fee: The initial fee for this contract is 0.20% of the
total value of the reference shares. On the due date
of this contract the Client will pay the Bank a
closing fee of 0.20% of the value of the reference
shares on the due date. The closing fee in question
will not be incurred if the Client initiates a buy-out
of the reference shares on the closing date of the
contract. The fees are payable when this contract is
terminated. Brokerage fees are not included in the
aforementioned fees.
OBLIGATION OF THE BANK
Payment: The Bank pays the Client the increase in value of the
reference shares from the contract date to the closing
date, and the reverse if the value of the reference
shares decreases.
Bank clearance: The next banking day after.
MUTUAL OBLIGATIONS AND/OR RIGHTS
Payment arrangement/ The payments between the parties shall always be
netting: netted out, so that there is never any payment
between either party except for the net difference.
Should the total payment due from the Client be higher
than the total payment due from the Bank the bank will
debit the Client's account for the difference. Should
the reverse be the case the bank will deposit the
difference into the Client's account. Payment is due
two banking days after closing day, or the due date if
the contract is closed earlier.
Extension and/or Should the Client wish for a change to this contract,
and should the Bank changes: agree to the change, the
Client will pay the Bank a fee of ISK 10,000 for each
change. Should the Client wish for an extension of
this contract the Client shall pay the bank a fee of
ISK 10,000 for each extension, in addition to paying
the Bank the difference in each other's netted
payments, as long as the difference is an obligation
to pay on the behalf of the Client.
Closing before the Should the Client wish to close this contract during
closing date: the contract period the Bank will, without any
guarantee or obligation on its part, release the
Client from his obligations and the contract will be
netted in accordance with market conditions at the
time. The fee incurred by this for the Client (aside
from the potential deficit of the contract due to
market conditions) can be anything up to 0.125% of the
reference shares amount for each month that remains of
the contract period, as determined by the Bank.
Security/Collateral: To secure the prompt and full payment by the Client
according to this contract, Jakub a Dul Jacobsen,
[Icelandic id no.], has pledged collateral which is
specified in the Pledge Agreement concerning
derivatives and its appendices which count as part of
this contract. This agreement of collateralization is
signed by Jakub a Dul Jacobsen and further obligations
found therein concerning the Pledged Assets have been
accepted by Jakup Napoleon Purkhus, [Icelandic id
no.], and the aforementioned parties are the sole
shareholders in Smaratorg ehf. and shares in this
company are part of the Pledged Assets according to
the Pledge Agreement. Collateral needs of the contract
and the value of the collateral are calculated daily
according to the Bank's policy for determining
collateral needs for derivatives and the value of the
Client's collateral, as they are at any time. The
aggregate
19
collateral needs incurred by contracts the Client has
entered are further defined in the parties' Pledge
Agreement. If the value of the collateral, as
determined by the Bank, is not sufficient to satisfy
the calculated collateral needs of the contract,
according to the Pledge Agreement, the Bank may
require the Client to pledge satisfactory collateral
as determined by the Bank such that the collateral
requirements of the contract are fully satisfied. If
the Client fails to meet the requirements set forth
by the Bank concerning the pledge of satisfactory
collateral within the timeframe the Bank gives him,
the Bank may at any time consider this as an event of
default of the contract and may declare this Equity
Swap confirmation to become due without specific
notification to the Client thereof. As remedy in
response to such events of default a method of
payment shall come into effect in the same manner as
defined above, i.e. by netting.
The Bank reserves the right to terminate the contract
and to sell the collateral in accordance with further
stipulations in the contract concerning collateral if
the Bank deems market conditions are such that the
risk associated with the collateral will not prove
sufficient at the termination of the contract. The
Bank my utilize the collateral pledged by the Client
in any way the Bank sees fit as payment concerning the
obligations of the Client according to this contract.
The Pledged Assets may be sold without a court order
of sale.
Insolvency: Should either party become insolvent this contract
will automatically terminate without any specific
notification thereof. In cases of insolvency the
method of payout shall be the same as above, i.e.
netted.
General terms: In addition to the terms in this contract the general
terms regarding interest and currency swaps published
by the Bankers' and Securities Dealers' Association of
Iceland in February 1998 (1st edition) which the
Client is familiar with. If there is a discrepancy
between this contract and the general terms this
contract supersedes the general terms. Additionally
this contract is also governed by the general market
terms for clients of Capital Markets division of
Kaupthing Bank issued by the board of Kaupthing Bank,
as they are at the time and which the Client has
specifically agreed to.
Signature: As confirmation the parties to this contract sign this
contract in duplicate and each party retains one copy.
With his signature the Client authorizes the above
transactions and confirms that he has studied the
nature of currency and interest swaps and sought the
advice of experts outside the Bank before he signed if
he thought that necessary.
Should any legal proceedings arise regarding this agreement they can be tried
before the Reykjavik Municipal Court.
This agreement is not negotiable to a third party without the agreement of both
parties.
Reykjavik 31st of October 2005
On behalf of Kaupthing Bank hf.
(sign)
On behalf of Kaupthing Bank hf.
(sign)
Lagerinn ehf.
(sign)
Witnesses to the correct date and signature
(sign)
20
EXHIBIT C
---------
Agreement Concerning Swap Agreement On Equity, dated November 13, 2005 by and
between Kaupthing and Lagerinn.
This agreement is a translation of an agreement made between Kaupthing Bank hf.,
[Icelandic id no.], herein after called "the Bank" and Lagerinn ehf.,
[Icelandic id no.] dated in November 2005, and is not a copy of the
Equity Swap Confirmation ID nr. AFS10631 itself. If any difference between the
English and Icelandic text occurs, the Icelandic version shall prevail.
EQUITY SWAP CONFIRMATION ID NR. AFS10631
LAGERINN EHF.
Parties to this contract: Kaupthing Bank hf., [Icelandic id no.], herein called
"the Bank" and Lagerinn ehf., [Icelandic id no.],
Smaratorg 1, 200 Kopavogur, herein after called "the
Client".
Date of contract: 13th of November 2005
Start of interest period: 13th of November 2005
Closing date: 5th of April 2006
Due date: Closing date, or the date which the contract is
closed if earlier.
Reference number: 37120
SWAPS ON CLOSING DAY
Reference amount:
Amount in
Currency Ratio Exchange rate currency Amount in ISK
---------- --------- --------------- --------------- ----------------
USD 100.00% 62.26 16,539,708.26 1.029.762.236
The reference amount is equal to the value of the reference shares. The fee for
the contract is not included in the reference amount.
Reference shares:
Nominal Amount in
Ticker Currency amount Exchange rate currency Amount in ISK
-------- -------- ---------- ------------- ------------- -------------
PIR US USD 1,481,600 11.16341 16,539,708.26 1.029.762.236
The reference shares are shares in PIR US (Pier 1 Imports Inc. is in number
US7202791080)
Stock split: In the event of split shares being issued during the
contract period, these same shares are then owned by
the Bank, while reference shares named in this
contract will at the same time increase according to
the split shares issued.
Dividend: Dividends, if any, from reference shares during the
contract period shall be paid by the Bank to the
Client on the closing day of the contract.
OBLIGATION OF CLIENT
Interest period: The interest period in each instance shall be from the
first date of interest period to the due date.
Due date: Closing date, or the date which the contract is closed
if earlier.
Base of interest at date of contract:
Currency Base interest Markup Interest in total
---------- --------------- ---------- -------------------
USD 4.4909% 1.30% 5.7909%
Interest is calculated on the reference amount for the interest period.
Bank clearance: A/360, except for GBP, then it's A/365
21
Payment: The Client has to pay any and all increases that may
occur on the exchange rate of the currency in the
reference amount from the date of the contract, but
any and all decreases in the exchange rate of the
currency that may occur will be subtracted. The Client
must also pay interest on the reference amount in
accordance with this contract. All currency shall be
exchanged for ISK on the due date according to the
average general exchange rate of the appropriate
currency which the Bank publishes in a general
currency exchange rate table on the due date, unless
the parties agree to a different exchange rate.
Fee: The initial fee for this contract is 0.20% of the
total value of the reference shares. On the due date
of this contract the Client will pay the Bank a
closing fee of 0.20% of the value of the reference
shares on the due date. The closing fee in question
will not be incurred if the Client initiates a buy-out
of the reference shares on the closing date of the
contract. The fees are payable when this contract is
terminated. Brokerage fees are not included in the
aforementioned fees.
OBLIGATION OF THE BANK
Payment: The Bank pays the Client the increase in value of the
reference shares from the contract date to the closing
date, and the reverse if the value of the reference
shares decreases.
Bank clearance: The next banking day after.
MUTUAL OBLIGATIONS AND/OR RIGHTS
Payment arrangement/ The payments between the parties shall always be
netting: netted out, so that there is never any payment,
between either party except for the net difference.
Should the total payment due from the Client be
higher than the total payment due from the Bank the
bank will debit the Client's account for the
difference. Should the reverse be the case the bank
will deposit the difference into the Client's account.
Payment is due two banking days after closing day, or
the due date if the contract is closed earlier.
Extension and/or Should the Client wish for a change to this contract,
and should the Bank changes: agree to the change, the
Client will pay the Bank a fee of ISK 10,000 for each
change. Should the Client wish for an extension of
this contract the Client shall pay the bank a fee of
ISK 10,000 for each extension, in addition to paying
the Bank the difference in each other's netted
payments, as long as the difference is an obligation
to pay on the behalf of the Client.
Closing before the Should the Client wish to close this contract during
closing date: the contract period the Bank will, without any
guarantee or obligation on its part, release the
Client from his obligations and the contract will be
netted in accordance with market conditions at the
time. The fee incurred by this for the Client (aside
from the potential deficit of the contract due to
market conditions) can be anything up to 0.125% of the
reference shares amount for each month that remains of
the contract period, as determined by the Bank.
Security/Collateral: To secure the prompt and full payment by the Client
according to this contract, Jakub a Dul Jacobsen,
[Icelandic id no.], has pledged collateral which is
specified in the Pledge Agreement concerning
derivatives and its appendices which count as part of
this contract. This agreement of collateralization is
signed by Jakub a Dul Jacobsen and further obligations
found therein concerning the Pledged Assets have been
accepted by Jakup Napoleon Purkhus, [Icelandic id
no.], and the aforementioned parties are the sole
shareholders in Smaratorg ehf. and shares in this
company are part of the Pledged Assets according to
the Pledge Agreement. Collateral needs of the contract
and the value of the collateral are calculated daily
according to the Bank's policy for determining
collateral needs for derivatives and the value of the
Client's collateral, as they are at any time. The
aggregate
22
collateral needs incurred by contracts the Client has
entered are further defined in the parties' Pledge
Agreement. If the value of the collateral, as
determined by the Bank, is not sufficient to satisfy
the calculated collateral needs of the contract,
according to the Pledge Agreement, the Bank may
require the Client to pledge satisfactory collateral
as determined by the Bank such that the collateral
requirements of the contract are fully satisfied. If
the Client fails to meet the requirements set forth
by the Bank concerning the pledge of satisfactory
collateral within the timeframe the Bank gives him,
the Bank may at any time consider this as an event of
default of the contract and may declare this Equity
Swap confirmation to become due without specific
notification to the Client thereof. As remedy in
response to such events of default a method of
payment shall come into effect in the same manner as
defined above, i.e. by netting.
The Bank reserves the right to terminate the contract
and to sell the collateral in accordance with further
stipulations in the contract concerning collateral if
the Bank deems market conditions are such that the
risk associated with the collateral will not prove
sufficient at the termination of the contract. The
Bank my utilize the collateral pledged by the Client
in any way the Bank sees fit as payment concerning
the obligations of the Client according to this
contract. The Pledged Assets may be sold without a
court order of sale.
Insolvency: Should either party become insolvent this contract
will automatically terminate without any specific
notification thereof. In cases of insolvency the
method of payout shall be the same as above, i.e.
netted.
General terms: In addition to the terms in this contract the general
terms regarding interest and currency swaps published
by the Bankers' and Securities Dealers' Association of
Iceland in February 1998 (1st edition) which the
Client is familiar with. If there is a discrepancy
between this contract and the general terms this
contract supersedes the general terms. Additionally
this contract is also governed by the general market
terms for clients of Capital Markets division of
Kaupthing Bank issued by the board of Kaupthing Bank,
as they are at the time and which the Client has
specifically agreed to.
Signature: As confirmation the parties to this contract sign this
contract in duplicate and each party retains one copy.
With his signature the Client authorizes the above
transactions and confirms that he has studied the
nature of currency and interest swaps and sought the
advice of experts outside the Bank before he signed
if he thought that necessary.
Should any legal proceedings arise regarding this agreement they can be tried
before the Reykjavik Municipal Court.
This agreement is not negotiable to a third party without the agreement of both
parties.
Reykjavik 13th of November 2005 On behalf of Kaupthing Bank hf.
(sign)
On behalf of Kaupthing Bank hf.
(sign)
Lagerinn ehf.
(sign)
Witnesses to the correct date and signature
(sign)
23
EXHIBIT D
---------
Agreement Concerning Swap Agreement On Equity, dated December 9, 2005 by and
between Kaupthing and Lagerinn.
This agreement is a translation of an agreement made between Kaupthing Bank
hf., [Icelandic id no.], herein after called "the Bank" and
Lagerinn ehf., [Icelandic id no.] dated in December 2005, and is
not a copy of the Equity Swap Confirmation ID nr. AFS11015 itself. If any
difference between the English and Icelandic text occurs, the Icelandic
version shall prevail.
EQUITY SWAP CONFIRMATION ID NR. AFS11015
LAGERINN EHF.
Parties to this contract: Kaupthing Bank hf., [Icelandic id no.], herein called
"the Bank" and Lagerinn ehf., [Icelandic id no.],
Smaratorg 1, 200 Kopavogur, herein after called "the
Client".
Date of contract: 9th of December 2005
Start of interest period: 9th of December 2005
Closing date: 5th of April 2006
Due date: Closing date, or the date which the contract is closed
if earlier.
Reference number: 38481
SWAPS ON CLOSING DAY
Reference amount:
Amount in
Currency Ratio Exchange rate currency Amount in ISK
---------- ----------- --------------- --------------- ---------------
USD 100.00% 63.6317 28,928,702.78 1,840,782,537
The reference amount is equal to the value of the reference shares. The fee for
the contract is not included in the reference amount.
Reference shares:
Nominal Amount in
Ticker Currency amount Exchange rate currency Amount in ISK
------ -------- ----------- -------------- ------------- -------------
PIR US USD 2,513,300 11.510247 28,928,703.79 1,840,782,601
The reference shares are shares in PIR US (Pier 1 Imports Inc. is in
number US7202791080)
Stock split: In the event of split shares being issued during the
contract period, these same shares are then owned by
the Bank, while reference shares named in this
contract will at the same time increase according to
the split shares issued.
Dividend: Dividends, if any, from reference shares during the
contract period shall be paid by the Bank to the
Client on the closing day of the contract.
OBLIGATION OF CLIENT
Interest period: The interest period in each instance shall be from the
first date of interest period to the due date.
Due date: Closing date, or the date which the contract is closed
if earlier.
Base of interest at date of contract:
Currency Base interest Markup Interest in total
-------- ------------- ---------- -----------------
USD 4.6355% 1.30% 5.9355%
Interest is calculated on the reference amount for the interest period.
Bank clearance: A/360, except for GBP, then it's A/365
24
Payment: The Client has to pay any and all increases that may
occur on the exchange rate of the currency in the
reference amount from the date of the contract, but
any and all decreases in the exchange rate of the
currency that may occur will be subtracted. The Client
must also pay interest on the reference amount in
accordance with this contract. All currency shall be
exchanged for ISK on the due date according to the
average general exchange rate of the appropriate
currency which the Bank publishes in a general
currency exchange rate table on the due date, unless
the parties agree to a different exchange rate.
Fee: The initial fee for this contract is 0.20% of the
total value of the reference shares. On the due date
of this contract the Client will pay the Bank a
closing fee of 0.20% of the value of the reference
shares on the due date. The closing fee in question
will not be incurred if the Client initiates a buy-out
of the reference shares on the closing date of the
contract. The fees are payable when this contract is
terminated. Brokerage fees are not included in the
aforementioned fees.
OBLIGATION OF THE BANK
Payment: The Bank pays the Client the increase in value of the
reference shares from the contract date to the closing
date, and the reverse if the value of the reference
shares decreases.
Bank clearance: The next banking day after.
MUTUAL OBLIGATIONS AND/OR RIGHTS
Payment arrangement/ The payments between the parties shall always be
netting: netted out, so that there is never any payment between
either party except for the net difference. Should the
total payment due from the Client be higher than the
total payment due from the Bank the bank will debit
the Client's account for the difference. Should the
reverse be the case the bank will deposit the
difference into the Client's account. Payment is due
two banking days after closing day, or the due date if
the contract is closed earlier.
Extension and/or Should the Client wish for a change to this contract,
and should the Bank changes: agree to the change, the
Client will pay the Bank a fee of ISK 10,000 for each
change. Should the Client wish for an extension of
this contract the Client shall pay the bank a fee of
ISK 10,000 for each extension, in addition to paying
the Bank the difference in each other's netted
payments, as long as the difference is an obligation
to pay on the behalf of the Client.
Closing before the Should the Client wish to close this contract during
closing date: the contract period the Bank will, without any
guarantee or obligation on its part, release the
Client from his obligations and the contract will be
netted in accordance with market conditions at the
time. The fee incurred by this for the Client (aside
from the potential deficit of the contract due to
market conditions) can be anything up to 0.125% of the
reference shares amount for each month that remains of
the contract period, as determined by the Bank.
Security/Collateral: To secure the prompt and full payment by the
Client according to this contract, Jakub a Dul
Jacobsen, [Icelandic id no.], has pledged
collateral which is specified in the Pledge
Agreement concerning derivatives and its
appendices which count as part of this contract.
This agreement of collateralization is signed by
Jakub a Dul Jacobsen and further obligations found
therein concerning the Pledged Assets have been
accepted by Jakup Napoleon Purkhus, [Icelandic id
no.], and the aforementioned parties are the sole
shareholders in Smaratorg ehf. and shares in this
company are part of the Pledged Assets according
to the Pledge Agreement. Collateral needs of the
contract and the value of the collateral are
calculated daily according to the Bank's policy
for determining collateral needs for derivatives
and the value of the Client's collateral, as they
are at any time. The aggregate
25
collateral needs incurred by contracts the Client has
entered are further defined in the parties' Pledge
Agreement. If the value of the collateral, as
determined by the Bank, is not sufficient to satisfy
the calculated collateral needs of the contract,
according to the Pledge Agreement, the Bank may
require the Client to pledge satisfactory collateral
as determined by the Bank such that the collateral
requirements of the contract are fully satisfied. If
the Client fails to meet the requirements set forth
by the Bank concerning the pledge of satisfactory
collateral within the timeframe the Bank gives him,
the Bank may at any time consider this as an event of
default of the contract and may declare this Equity
Swap confirmation to become due without specific
notification to the Client thereof. As remedy in
response to such events of default a method of
payment shall come into effect in the same manner as
defined above, i.e. by netting.
The Bank reserves the right to terminate the contract
and to sell the collateral in accordance with further
stipulations in the contract concerning collateral if
the Bank deems market conditions are such that the
risk associated with the collateral will not prove
sufficient at the termination of the contract. The
Bank my utilize the collateral pledged by the Client
in any way the Bank sees fit as payment concerning
the obligations of the Client according to this
contract. The Pledged Assets may be sold without a
court order of sale.
Insolvency: Should either party become insolvent this contract
will automatically terminate without any specific
notification thereof. In cases of insolvency the
method of payout shall be the same as above, i.e.
netted.
General terms: In addition to the terms in this contract the general
terms regarding interest and currency swaps published
by the Bankers' and Securities Dealers' Association of
Iceland in February 1998 (1st edition) which the
Client is familiar with. If there is a discrepancy
between this contract and the general terms this
contract supersedes the general terms. Additionally
this contract is also governed by the general market
terms for clients of Capital Markets division of
Kaupthing Bank issued by the board of Kaupthing Bank,
as they are at the time and which the Client has
specifically agreed to.
Signature: As confirmation the parties to this contract sign this
contract in duplicate and each party retains one copy.
With his signature the Client authorizes the above
transactions and confirms that he has studied the
nature of currency and interest swaps and sought the
advice of experts outside the Bank before he signed
if he thought that necessary.
Should any legal proceedings arise regarding this agreement they can be tried
before the Reykjavik Municipal Court.
This agreement is not negotiable to a third party without the agreement of both
parties.
Reykjavik 9th of December 2005
On behalf of Kaupthing Bank hf.
(sign)
On behalf of Kaupthing Bank hf.
(sign)
Lagerinn ehf.
(sign)
Witnesses to the correct date and signature
(sign)
26
Exhibit E
---------
Committed Revolving Credit Facility, dated February 6, 2006 between Lagerinn and
Landsbanki.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
USD 50.000.000,-
Committed Revolving Credit Facility
Between
Lagerinn ehf.
as Borrower
and
Landsbanki Islands hf.
as the Bank
THIS AGREEMENT is dated February 6, 2006 between:
(1) Lagerinn ehf. (the "Borrower");
(2) Landsbanki Islands hf., (the "Bank")
WHEREAS the Bank has agreed to make available to the Borrower a committed
revolving credit facility in the amount of USD 50.000.000,- or the equivalent
amount in any of the Optional Currencies on the terms of this Agreement,
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS
1.1. Terms Defined
In this Agreement:
"Availability Period"
means the period from and including the date of this Agreement to and
including the Business Day falling one month prior to the Termination
Date.
"Business Day"
means a day on which banks are open in Reykjavik and London.
"Borrower"
means Lagerinn ehf., [Icelandic id no.], Smaratorgi 1, 200
Kopavogur, Iceland.
"Default"
means any Event of Default and any event which, with the giving of
notice, lapse of time or both or other applicable condition(s), would
constitute an Event of Default.
"Effective Date"
means the date on which this Agreement is executed and delivered by
the Borrower to the Bank.
"Encumbrance"
means any mortgage, pledge, lien, charge, assignment, hypothecation,
security interest, title retention, preferential right or trust
arrangement and any other security agreement or arrangement.
"Event of Default"
means any of the events specified in Clause 11.1 (Events of Default).
--------------------------------------------------------------------------------
1
"Exchange Rate"
means the spot rate of exchange quoted by the Bank for the purchase of
the relevant Optional Currency(ies) with USD.
"Facility Amount"
means the equivalent of USD 50.000.000,- in any Optional Currency.
"Interest Period"
means a period ascertained in accordance with Clause 6 (Interest
Periods).
"LIBOR"
means in relation to each Loan, for each Interest Period relative
thereto, the arithmetic mean, rounded upward if necessary, to the
nearest one-sixteenth of one per cent (1/16%) of the annual rates of
interest appearing on page LIBOR01 on Reuters (BBA fixings) or any
equivalent successor to such page or other page as appropriate (as
determined by the Bank) (the "Reuters") for deposits in the relevant
currency in the London Interbank Market at or about 11.00 a.m. (London
time) two Business Days, prior to the commencement of the Interest
Period to which the same is to apply for a period comparable to such
Interest Period;
"Loan"
means a borrowing made hereunder or (as the context requires) the
principal amounts thereof from time to time outstanding (collectively
the "Loans").
"Margin"
means one point eighty five per cent (1,85 %) per annum.
"Optional Currencies"
means ISK, EUR, JPY, SEK, DKK, GBP, USD, CHF, and each of them an
"Optional Currency".
"Person"
means any individuals, partnerships, corporations, governments,
governmental bodies, trusts, joint stock companies, joint ventures,
limited liability companies and unincorporated associations.
"Termination Date"
means the date falling three months after the date of this Agreement.
2. THE FACILITY
Subject to the terms of this Agreement, the Bank agrees to make
available to the Borrower a revolving loan facility in an aggregate
amount equal to the Facility Amount.
--------------------------------------------------------------------------------
2
3. DRAWDOWN
3.1. Availability
Subject to the terms of this Agreement, the Facility will be available
for drawdown in the combination of the Optional Currencies, at the
Exchange Rate at the date of drawdown, during the Availability Period.
Each borrowing under this Agreement is regarded as a separate Loan and
each loan is made on a fully revolving basis for at least one month
and up to three months.
Proceeds of Loans drawn under this Agreement can only be used by the
Borrower to purchase shares in Pier 1 Imports, Inc., a Delaware
corporation or to purchase shares in another company which has been
approved by the Bank. All shares which are purchased with Loans drawns
under this Agreement shall be pledged in favor of the Bank in
accordance with Clause 12.
3.2. Notice of Drawing
When the Borrower wishes to borrow hereunder, it shall give notice to
the Bank in the form of Exhibit A, appropriately completed, to be
received prior to 12.00 a.m. (GMT) on the 2nd Business Day prior to
the proposed date for borrowing, specifying in respect of the proposed
borrowing:
(a) the date of drawdown of the Loan (which shall be a Business Day);
(b) the amount in USD to be drawn or in the relevant Optional
Currency, and
(c) an account of the Borrower at a bank to which the proceeds of the
borrowing are to be credited.
Subject to the terms of this Agreement, such notice of drawing
("Notice of Drawing") shall be irrevocable and the Borrower shall be
bound to borrow in accordance with such Notice of Drawing.
Notices of Drawing have to be signed by the Borrower or persons who
have been declared with full power and authority to sign such notices
on behalf of the Borrower. The Borrower shall on that basis give to
the bank Power of Attorney in the form of Exhibit B.
4. CONDITIONS PRECEDENT
4.1. Documentary conditions precedent
The obligation of the Bank hereunder to advance the Loan is subject to
the condition that the Bank shall first have received all of the
following in form and substance satisfactory to the Bank:
a) The Company Certificate and the Articles of Association of the
Borrower.
b) Delivery of Drawdown Notice in a form which is satisfactory in
the opinion of the Bank.
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4.2. Further conditions precedent
The obligation of the Bank hereunder to advance a Loan is subject to
the following further conditions precedent both at the time of the
request for and at the time of the advance of such Loan:
(a) the matters represented by the Borrower set out in Clause 9.1
(Representations and warranties) are correct; and
(b) no Event of Default has occurred or will result from such
advance.
5. REPAYMENT, PREPAYMENTS AND CANCELLATION OF COMMITMENTS
5.1. Repayment
The Borrower shall repay each Loan to the Bank on it's relevant
repayment date as defined in each drawdown notice. No borrowing made
hereunder can have a repayment date that exceeds the Termination Date.
5.2. Prepayment
The Borrower may, by giving no less than 5 days prior written notice
to the Bank, prepay without penalty or premium any Loan on any
Business Day in whole or in part.
6. INTEREST PERIODS
6.1. Interest Periods
Each Interest Period shall be of at least one month duration up to
three months duration commencing on the drawdown date of each proposed
Loan.
6.2. Business Days
If any Interest Period would end on a day which is not a Business Day,
such Interest Period shall be extended to the next succeeding Business
Day unless such day will fall in the next calendar month, in which
event it shall be brought forward to the immediately preceding
Business Day. If any Interest Period commences on the last Business
Day in a calendar month or if there is no corresponding day in the
calendar month in which it is to end, then it shall end on the last
Business Day in the later calendar month.
7. INTEREST
7.1. Rate
The rate of interest applicable to the Loan for each Interest Period
relative thereto shall be applicable LIBOR interest plus the Margin
per annum.
7.2. Due Dates
Accrued interest on each Loan shall be payable by the Borrower on the
last day of each Interest Period.
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7.3. Calculation Basis
Interest shall accrue from day to day, and be computed on the basis of
a year of 360 days and for the actual number of days elapsed unless
for Loans in GBP the Calculation Basis shall be 365 days.
7.4. Default Interest
In the event that the Borrower fails to pay any principal, interest or
any other amount due and payable hereunder, or upon the occurrence of
any Event of Default according to Clause 11.1. the Borrower shall pay
interest ("Default Interest") on such amount or accelerated amount
from the due date until payment is received by the Bank at the rate of
the relevant LIBOR plus 8,0 % (eight per cent) per annum.
7.5. Currency
Principal repayments and interest on the Loan shall be payable in the
currency in which the relevant borrowing was made.
7.6. Certification
Each determination of a rate of interest by the Bank hereunder shall,
in the absence of manifest error, be conclusive and shall be promptly
notified to the Borrower.
8. PAYMENTS
8.1. Funds and Place
All payments to be made by the Borrower hereunder shall be made
immediately available and transferable no later than 10.00 a.m. (GMT)
on the date upon which the payment is due to the account which the
Bank may from time to time designate.
8.2. Taxes
All payments to be made by the Borrower hereunder shall be made:
(i) without set-off or counterclaim; and
(ii) free and clear of and without deduction for or on account of any
taxes.
In addition, if any taxes or amounts in respect thereof must be
deducted from any amounts payable or paid by the Borrower, the
Borrower shall pay such additional amounts as may be necessary to
ensure that the Bank receives a net amount equal to the full amount
which it would have received on the due date had payment not been made
subject to such taxes.
8.3. Extensions
Whenever any payment hereunder shall become due on a day which is not
a Business Day, the due date thereof shall be extended to the next
succeeding Business Day unless such day will fall in the next calendar
month in which event it shall be brought forward to the immediately
preceding Business Day. During any extension of the due date for
payment of
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5
the principal of a Loan hereunder interest shall be payable on such
principal at the rate payable on the original due date.
8.4. Appropriations
In the case of a partial payment, the Bank may appropriate such
payment towards such of the obligations of the Borrower hereunder as
the Bank may decide.
9. REPRESENTATIONS AND WARRANTIES
9.1. Representations and warranties
The Borrower represents and warrants to the Bank that:
a) Corporate Existence: It is a duly organised and validly existing
company incorporated and existing under the laws of its
jurisdiction;
b) Powers and Authorisations: It has the power to enter into and
perform this Agreement and the transactions contemplated hereby
and has taken all necessary action to authorize the entry into
and performance of this Agreement and the transactions
contemplated hereby;
c) Validity and Enforceability: This Agreement constitutes legal,
valid and binding obligations of it enforceable in accordance
with its terms;
d) Performance: The performance or undertaking of the obligations
set out in this Agreement will not contravene any applicable law
or regulation or any agreement binding upon it;
e) Payments: All payments made or to be made by it under this
Agreement or other document envisaged hereunder can be made free
and clear of, and without deduction or withholding for or in
account of, any Taxes;
f) Governing law and enforcement: The choice of Icelandic law as the
governing law of this Agreement will be recognised and enforced
in its jurisdiction of incorporation and any judgment obtained in
Iceland in relation to this Agreement will be recognised and
enforced in its jurisdiction of incorporation;
g) No Default: No Default has occurred which might have a material
adverse change on its business or financial condition;
h) Non-conflict with laws: The entry into and performance by it of
this Agreement and the transactions contemplated hereby do not
and will not conflict with (i) any of its constitutional
documents or (ii) any agreement or document to which it is a
party or which is binding upon it or any of its assets, nor
result in the creation or imposition of any encumbrance on any of
its assets pursuant to the provisions of any such agreement or
document;
i) Consents: All authorisations, approvals, consents, licenses,
exemptions, filings, registrations, notarisations and other
matters, official or otherwise, required or advisable in
connection with the entry into performance, validity and
enforceability of this Agreement and the transactions
contemplated hereby have been obtained or effected and are in
full force and effect;
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j) Full Disclosure: All information supplied by it in connection
with this Agreement is true, complete, accurate in all material
respects and it is not aware of any material facts or
circumstances that have not been disclosed to the Bank and which
might, if disclosed, adversely affect the decision of a person
considering whether or not to provide finance to it;
k) No filings required: It is not necessary to ensure the legality,
validity, enforceability or admissibility in evidence of this
Agreement that it or any other instrument be notarised, filed,
recorded, registered or enrolled in any court or public office or
that any stamp, registration or similar tax or charge be paid on
or in relation to this Agreement and this Agreement is in proper
form for its enforcement in its jurisdiction;
l) Litigation: No litigation, arbitration or administrative
proceedings are current or, to it knowledge pending or
threatened, which is likely to have material adverse effect on
the financial standing of the Borrower.
9.2. Repetition
The representations and warranties set out in Clause 9.1
(Representations and warranties) shall survive the execution of this
Agreement and shall be deemed to be repeated by the Borrower at the
beginning of each Interest Period with reference to the facts and
circumstances then subsisting, as if made at each such time.
10. UNDERTAKINGS
10.1. Duration
The undertakings in this Clause 10 (Undertakings) shall remain in
force from and after the date hereof and so long as any amount is or
may be outstanding hereunder.
10.2. Accounts
The Borrower shall deliver to the Bank:
(a) its audited annual accounts within one month of the same being
prepared and in any event not later than 90 days after the end of
the period to which such statements relate; and
(b) its semi annual accounts within one month of the same being
prepared and in any event not later than 45 days after the end of
the period to which such statements relate.
The accounts of the Borrower shall be prepared in accordance with
generally accepted accounting principles in its jurisdiction of
incorporation.
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10.3. Compliance
The Borrower shall maintain and ensure compliance with all material
permits, licences, consents filing and disclosure requirements and
undisputed agreements relating to its business activities and shall
forthwith notify the Bank if any of these become subject to
administrative or court proceedings initiated by the Borrower or any
third party
10.4. Corporate Identity
The Borrower undertakes to procure that no change or amendment to its
Articles of Association or other constitutive documents (including,
but not limited to change of purpose) shall be made as long as any
debt under this Agreement is unpaid to the Bank
10.5. Notification of Defaults
The Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) promptly upon its occurrence.
10.6. Change of Business:
Except with the prior written consent of the Bank, the Borrower will
not make any substantial change in its business, as conducted as at
the date of this Agreement, or sell or cease to carry on its business
as conducted at the date of this Agreement.
10.7. No Merger
The Borrower, shall not, without the prior written consent of the
Bank, enter into any amalgamation, demerger, merger or reconstruction
otherwise than unless the Borrower is the surviving entity.
10.8. Disposals
The Borrower shall not either in a single transaction or in a series
of transactions, without the prior written consent of the Bank, sell,
transfer, lease or otherwise dispose of, or cease to exercise direct
control over any part of its present or future assets, of value
exceeding 10% of total book value of the Borrower.
10.9. Insurance
The Borrower will maintain in full force and effect at all times, with
financially sound and reputable insurance companies that customarily
write insurance for the risks covered thereby, insurance against such
risks and in such amounts (and with such deductibles) as are
customarily carried by similar companies in similar businesses.
10.10. Compliance with laws and payment of Taxes
(a) The Borrower shall comply in all material respects with all laws
and regulations applicable to it provided that nothing in this
Clause shall prevent the Borrower from contesting in good faith
the application to it of such laws and regulations.
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(b) The Borrower shall pay all its taxes when due, except to the
extent the taxes are contested in good faith and by appropriate
means, and a reserve reasonably regarded as adequate and
generally required by international accounting standards has been
set aside for payment of those contested taxes.
(c) If any taxes or amounts in respect thereof must be deducted from
any amounts payable or paid by the Borrower hereunder, the
Borrower shall pay such additional amounts as may be necessary to
ensure that the Bank receives a net amount equal to the full
amount which it would have received on the due date had payment
not been made subject to such taxes.
10.11. Stamp-Duties
The Borrower shall pay or indemnify the Bank against any and all
stamp, registration and similar Taxes or charges which may be payable
in connection with the entry into, performance or enforcement of this
Agreement.
10.12. Financial Information
The Borrower shall furnish the Bank with a copy from time to time with
reasonable promptness of such financial and other information as to
itself as the Bank may reasonably require;
10.13. Dividends and other payments
The Borrower shall not, without prior written consent of the Bank, pay
any dividend or make any distribution of or on share capital or pay
interest or instalments on subordinated loans if such loans exist.
11 DEFAULT
11.1. Events of Default
Each of the events set out below is an Event of Default (whether or
not caused by any reason whatsoever outside the control of the
Borrower, or of any other Person):
(a) Non-payment: The Borrower fails to pay any amount payable by the
Borrower under this Agreement when due; or
(b) Default under other provisions. If the Borrower breaches any of
the undertakings in Clause 10 or other provisions of this
Agreement or any other Agreement related hereto especially the
representations and warranties in Clause 9.1, always provided
that the Borrower in the event of such breach (in the sole
opinion of the Bank) has not remedied such breach within 3
banking days from the date the Borrower receives notice thereof;
or
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(c) Cross default: failure by the Borrower to make payment when due
of any obligation (other than in respect of this Agreement)
exceeding USD 500.000 (or its equivalence in other currencies);
or default by the Borrower, in the performance of any agreement
under which any such obligation is created if the effect of such
default is to cause such obligation to become due, or to permit
the holder or holders of such obligation to declare such
obligation due prior to its normal maturity; or
(d) Loss of Licence: any material licence, material contract,
consent, approval or authorisation necessary for the Borrower to
conduct its business is lost, revoked, cancelled or materially
amended or terminated or notice of such loss, revocation,
cancellation or termination is given and such licence, material
contract or authorisation is not contemporaneously therewith
replaced on the same, substantially the same or improved terms;
or
(e) Cessation: the cessation by the Borrower of its operations or the
sale or other disposition of all or a substantial portion of its
assets, or a decision by the Borrower to cease its operations or
to sell or otherwise dispose of all or a substantial portion of
its assets; or
(f) Unlawfulness: at any time it is unlawful for the Borrower to
perform any of its obligations hereunder; or
(g) Legal process: any judgment or order made against the Borrower is
not stayed or complied with within fourteen days or a creditor
attaches or takes possession of, or a distress, execution,
sequestration or other process is levied or enforced upon or
against, any of the undertakings, assets, rights or revenues of
the Borrower and is not discharged within fourteen days, unless
in each case the same is being contested in good faith by
appropriate proceedings; or
(h) Insolvency; compositions: If the Borrower is unable to pay its
debts as they fall due, suspends making payment on any of its
debts or commences negotiations with one or more of its creditors
or, an order of a competent court or an event analogous thereto
shall be made or any effective resolution passed in relation to
the bankruptcy, composition proceedings, debt negations,
liquidation, winding-up or similar event of the Borrower; or
(i) Bankruptcy or insolvency proceedings: the Borrower takes any
action or any legal proceedings are started or other steps taken
for (i) the Borrower to be adjudicated or found bankrupt or
insolvent, (ii) the winding-up or dissolution of the Borrower, or
(iii) the appointment of a liquidator, administrator, trustee,
receiver or similar officer of the Borrower or the whole or any
part of their respective undertaking, assets, rights or revenues;
or
(j) Change of ownership or control of the Borrower: The majority of
the shares in the Borrower changes hands without a prior written
consent of the Bank. In this respect Change of Ownership
includes, but is not limited to mergers, amalgamations or
demergers; or
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(k) Material adverse change: any event or series of events occurs
which, in the reasonable opinion of the Bank, would have a
material adverse effect on the condition, operations, assets,
liabilities and prospects of the Borrower or on the ability of
the Borrower to comply with its obligations under this Agreement.
11.2. Acceleration
In the case of any such event as is mentioned in Clause 11.1 (Events
of Default), and at any time thereafter if any such event shall then
be continuing, the Bank shall by notice to the Borrower:
(a) declare that the obligations of the Bank hereunder shall be
cancelled forthwith whereupon the same shall be so cancelled
forthwith; and/or
(b) declare all Loans made herunder to be immediately due and payable
whereupon the same shall become immediately due and payable
together with all interest accrued thereon and all other amounts
payable hereunder.
11.3. Default Indemnity
The Borrower shall indemnify the Bank against any loss or expenses,
which the Bank may sustain or incur as a consequence of:
(a) the occurrence of any Default;
(b) any default in payment on the due date (or in the currency in
which such payment is due) of the principal of the Loans or any
part thereof or interest accrued thereon or any other amount
payable hereunder or any repayment of a Loan other than on the
Interest Payment Date relating thereto,
including but not limited to any loss or expenses on account of funds
borrowed, contracted for or utilised to fund any amount payable
hereunder. A certificate of the Bank of the amount of any such loss or
expense shall be conclusive in the absence of manifest error.
12 SECURITY
12.1. Pledge
To guarantee that payment will be made, on time and without loss, of
all Loans provided for in this Agreement, the Borrower hereby pledges
in favor of the Bank all shares which are purchased with Loans drawn
under this Agreement.
To guarantee that payment will be made, on time and without loss, of
all Loans provided for in this Agreement, Jakup a Dul Jacobsen has
pledged in favor of the Bank shares in Rumfatalagerinn ehf.,
[Icelandic id no.] at the nominal value of ISK 2.472.000,-
13 ACCOUNTS AS EVIDENCE
Accounts maintained by the Bank in connection herewith shall constitute
prima facie evidence of sums owing to the Bank hereunder in the absence of
manifest error.
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14 EXPENSES
14.1. Out-of-pocket expenses
Upon demand, all costs, taxes, charges and expenses (including
external and internal legal fees) incurred by the Bank in connection
with the making of this Agreement, shall be payable by the Borrower.
Such fee being payable on the date of incurrence.
14.2. Enforcement expenses
The Borrower shall reimburse the Bank on demand for the charges and
expenses (including value added tax or any similar tax thereon and
including the fees and expenses of legal advisers) incurred by it in
connection with the enforcement of, or the preservation of any rights
under, this Agreement.
15 STAMP DUTIES
The Borrower shall pay or indemnify the Bank against any and all stamp,
registration and similar Taxes or charges which may be payable in
connection with the entry into, performance or enforcement of this
Agreement (including penalties for late payment).
16 WAIVERS, REMEDIES CUMULATIVE
No failure to exercise and no delay in exercising on the part of the Bank,
any right, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege
preclude any other or further exercise thereof, or the exercise of any
other right, power or privilege. No waiver by Bank shall be effective
unless it is in writing.
17 NOTICES
17.1. Address
Except as otherwise stated herein, all notices or other communications
hereunder to any party hereto shall be in writing and shall be deemed
to be duly given or made when delivered (in the case of personal
delivery or letter) and when dispatched to such party addressed as
follows:
(a) if to the Borrower, to Lagerinn ehf. Fax: +__________________.
Attn:_______________________
(b) if to the Bank, to Landsbanki Islands hf., Hafnarstraeti 5. Fax
No: +354 410 3013. Attn: Corporate Banking;
or at such other address and facsimile number as such party may
hereafter specify for such purpose to the other parties.
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17.2. Non-working Days
A notice or other communication received on a non-working day or after
business hours in the place of receipt shall be deemed to be served on
the next following working day in such place.
18 ASSIGNMENTS AND SUBSTITUTION
18.1. Successors
This Agreement shall be binding upon and inure to the benefit of the
Borrower and the Bank and their respective permitted successors and
assigns.
18.2. Assignments by the Borrower
The Borrower may not assign or transfer all or any part of its rights
or obligations hereunder without the prior written consent of the
Bank.
18.3. Assignments by the Bank
The Bank may at any time assign or otherwise transfer or novate all or
any part of its rights or obligations hereunder and provided that any
transferee shall have confirmed to the Borrower prior to the transfer
taking effect, that it undertakes to be bound by the terms of this
Agreement as the Bank in form and substance satisfactory to the
Borrower. On the transfer being made, the Bank shall be relieved of
its obligations to the extent of the transfer of such obligations.
19 SET OFF
The Borrower authorises the Bank in the event of any non-payment of any
amounts hereunder when due to apply any credit balance (in whatever
currency) standing upon any account of the Borrower with any branch or
office of the Bank in or towards satisfaction of any sum, whether
principal, interest or otherwise, at any time due to the Bank from the
Borrower pursuant to this Agreement.
20 LANGUAGE
Each document referred to herein or to be delivered hereunder shall be in
the English language or accompanied by a certified English translation
thereof. In case of conflict and unless the Bank otherwise specify, the
English language version of any such document shall prevail.
21 GOVERNING LAW
This Agreement shall be governed by Icelandic law.
22 JURISDICTION
Each of the parties hereto irrevocably agrees that the District Court of
Reykjavik shall have jurisdiction to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and, for such purpose, irrevocably submits
to the jurisdiction of that court.
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23 SEVERABILITY
If any provision of this Agreement is prohibited or unenforceable in any
jurisdiction such prohibition or unenforceability shall not invalidate the
remaining provisions hereof or affect the validity or enforceability of
such provision in any other jurisdiction.
24 COUNTERPARTS
This Agreement may be executed in any number of counterparts and all of
such counterparts taken together shall be deemed to constitute one and the
same instrument.
IN WITNESS whereof the parties hereto have caused this Agreement to be duly
executed on the date first written above.
SIGNATORIES
AS THE BORROWER
On behalf of Lagerinn ehf.
AS THE BANK
On behalf of Landsbanki Islands hf.
Witnesses to the correct date and signatures:
APPENDIX A
NOTICE OF DRAWING
To: Landsbanki Islands hf.
Hafnarstraeti 5
101 Reykjavik.
Pursuant to Clause 3 (Drawdown) of the Committed Revolving Credit Facility
Agreement in the amount of USD 50.000.000,- dated_____________, (the
"Agreement") between ourselves as Borrower, and yourselves as the Bank we hereby
give you notice of the following proposed borrowing:
(a) Date of Drawdown: [ ]
(b) Amount and Currency [ ]
(c) Interest rate, LIBOR+ [ ]
(d) Payment Instructions: [ ]
(e) Due date [ ]
Terms defined in the Agreement shall have the same meaning herein.
We confirm that the matters represented by us and set out in Clause 9.1
(Representations and warranties) of the Agreement are true and accurate on the
date hereof as if made on such date and that no Default has occurred and is
continuing or would result from the proposed borrowing.
On behalf of Lagerinn ehf.
APPENDIX B
P O W E R O F A T T O R N E Y
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Lagerinn ehf., [Icelandic id no.], Smaratorgi 1, 200 Kopavogur as the Borrower,
and Landsbanki Islands hf., [Icelandic id no.], Austurstraeti 11, 155
Reykjavik, as the Bank, have entered into a Committed Revolving Credit Facility
Agreement (the Agreement) in the amount of USD 50.000.000,-
Lagerinn ehf. hereby appoints____________________________________with full power
and authority from the company, to sign all notices of drawing under the
Agreement.
______________________________________
(Signature specimen)
______________________________________
(Signature specimen)
Furthermore, each of the above-mentioned attorney is authorised to sign and/or
despatch all other documents and notices to be signed and/or despatched by the
Borrower under or in connection with the Agreement.
This Power of Attorney shall be governed by Icelandic law.
This Power of Attorney is valid until the Board of Directors have notified the
Bank about the cancellation.
____________2006.
On behalf of Lagerinn ehf.